Sartorius Stedim Biotech S.A. | Investor Relations

We focus on the attractive biopharmaceutical market characterized by long‑term and stable growth trends.

Key Growth Drivers

• Growing world population
• Increasing incomes and better access to healthcare services in emerging economies
• Aging population and rise in age-related diseases in industrialized countries

Medical progress is also fueling growth, resulting in the ongoing development and approval of new biopharmaceuticals and in the improvement or expansion of indications for already existing active pharmaceutical ingredients. Therefore, a growing number of biotech medications are being approved for treatment of rare diseases considered incurable until now, and innovative cell and gene therapies are projected to further drive growth in the biopharma sector.

Sartorius Stedim Biotech has leading market positions in core technologies and is continuously expanding its portfolio by new, complementary technologies that help our biopharma customers develop and manufacture medications faster and more easily. Our strength in selecting suitable partners or acquisition candidates is based upon our in-depth understanding of applications. We are thoroughly familiar with our customers’ requirements and their entire value-added chains, and particularly understand the interactivity of the systems they use. Our innovation strategy is based on three pillars:

• Integration of innovations through acquisitions
• Alliances with partners
• Own product development

Due to exceptionally strong organic growth, Sartorius Stedim Biotech invested considerably in building up production capacities in the reporting year. Capital expenditures totaled approximately €430 million in 2022 and were used to expand sites in Germany, France, Puerto Rico, the USA, South Korea, and China, among other countries.

North America and Asia are the key focal areas of the regional growth strategy. The USA is the world’s largest market for bioprocess equipment. Yet because it is home to the main competitors, Sartorius Stedim Biotech formerly had lower market share in this region than in Europe and Asia. By systematically strengthening its sales and service capacities, Sartorius Stedim Biotech has gained market share in the USA in recent years.

In Asia, one focus is on expanding production capacity in China, particularly for the Chinese market, which offers significant growth potential due to rising private and government health-care spending and the rapid establishment of regional biopharmaceutical plants. In South Korea, which offers excellent growth prospects with its dynamically expanding biopharma market, Sartorius Stedim Biotech started initial work to build a new production facility at the beginning of 2023.

The bioprocess technology market is characterized by relatively high entry barriers arising in part from the biopharmaceutical industry’s strong degree of regulation and its technological complexity.

Repeat business with sterile single-use products accounts for around three-quarters of the company’s sales revenue. These offer customers cost advantages, flexibility, and less resource usage, and thus a better ecological footprint compared with conventional processes employing reusable stainless-steel components.

The high share of recurring revenues is also bolstered by the strict regulatory requirements on the part of the customers. Because health authorities validate production processes as an integral part of an application for approval of a new medical drug, the components initially validated can be replaced only at considerable expense once they have been approved.

Beyond this, the company’s broad and stable customer base that is primarily addressed directly through a specialized sales force also contributes to this favorable risk profile.

Acquisitions that are complementary to or extend the company’s strengths appropriately have been and will remain part of our portfolio strategy. Due to high innovation dynamics, the company considers further additions to be possible on an ongoing basis across the entire breadth of the product portfolio.

Acquisition Criteria

• Complementarity of technologies to our existing portfolio
• Strong market positioning, for example, through innovative products with unique selling propositions
• Integration capability
• Appropriate valuation
• Growth and profitability profile

For many years, we have firmly embedded sustainability at many levels in our business. To us, it means operating responsibly and nurturing long term relationships – with respect to customers, employees, investors, business partners and society as a whole.

Company management confirms its 2023 sales revenue and profitability outlook, which was adapted in June 2023. Accordingly, Group sales revenue is expected to decline in the low to mid-teens percentage range in the full year; excluding Covid-19-related business, revenue would decline in the high single-digit to low teens percentage range. Acquisitions, including Polyplus, are expected to contribute around 2 percentage points to the sales revenue development (excluding Polyplus 1 percentage point). The underlying EBITDA margin is anticipated at around 30 percent (previous year 35.0 percent), whereby the positive margin effect from the Polyplus acquisition is not expected to have any significant impact due to its inclusion during the year.

The CAPEX ratio in 2023 is projected at around 15 percent and the ratio of net debt to underlying EBITDA at slightly below 4. While the Polyplus acquisition has been included in this outlook, possible future acquisitions are not.

All forecasts are based on constant currencies, as in the past years. Management also points out that the dynamics and volatilities in the industry have increased significantly in recent years. In addition, uncertainties due to the changed geopolitical situation, such as the emerging decoupling tendencies of various countries, are playing an increasing role. This results in higher uncertainty when forecasting business figures.

Sartorius Stedim Biotech views the current demand normalization after the pandemic as a phase that only temporarily overshadows the highly positive growth drivers of the life science and biopharma markets. Accordingly, the company does not change its medium-term targets until 2025.

Sartorius Stedim Biotech expects sales revenue of around 4.4 billion euros in 2025. The company plans to achieve this sales revenue increase primarily through organic growth and additionally by acquisitions.

The forecast for the Group’s underlying EBITDA margin in 2025 is more than 35 percent. The margin target includes expenses of around 1 percent of Group sales revenue for measures to reduce the company‘s CO₂ emission intensity.

Management also points out that the dynamics and volatilities in the industry have increased significantly in recent years. In addition, uncertainties due to the changed geopolitical situation, such as the emerging decoupling tendencies of various countries, are playing a greater role. This results in higher uncertainty when forecasting business figures.

All forecast figures are based on constant currencies.

Sartorius Stedim Biotech is a globally operating company with subsidiaries in more than 25 countries and more than 11,900 employees worldwide. The parent company of the Sartorius Stedim Biotech Group is Sartorius Stedim Biotech S.A., headquartered in Aubagne, France.

Sartorius Stedim Biotech S.A. is listed on the Euronext stock exchange in Paris. Approximately 74% of the share capital and around 85% of the voting rights of Sartorius Stedim Biotech S.A. are held by Sartorius AG.

Sartorius AG is an international leading partner for life science research and the biopharmaceutical industry and is headquartered in Göttingen, Germany. It is listed on the German Stock Exchange and operates two divisions: the bioprocess business as a subgroup under its parent corporation Sartorius Stedim Biotech S.A., and the laboratory business as a further subgroup.

Below you will find the legal and operational structure of Sartorius AG, the parent company of Sartorius Stedim Biotech S.A.